AIA Group Limited (stock code: 1299) on Friday announced a 20 percent growth in value of new business (VONB) for the third quarter ended 31 August 2017.
Ng Keng Hooi, AIA’s Group Chief Executive and President, said: “AIA has delivered another strong performance in the third quarter with 20 per cent growth in value of new business to US$824 million. The excellent progress we have made so far this year demonstrates the scale and resilience of AIA’s extraordinary growth opportunities, the strength of AIA’s businesses and the successful execution of our clear growth strategy.
“Asia’s economic progress has been driven by large populations entering the workforce, generating sharply rising incomes and creating a rapidly growing middle-class. The compounding effect of this increasing affluence and shift in spending habits is leading to a step change in life insurance demand across the region.
“AIA is deeply committed to helping these millions of people meet their substantial and growing long-term savings and protection needs. We are uniquely placed in the right markets to achieve this and we have built significant capabilities over our long history in the region, from our distribution and product platforms to our leading brand and strong financial position.
“Our focus continues to be on the strategic priorities that will sustain and build on these competitive advantages and make a material difference in shaping AIA’s future. I am confident that our teams will continue to deliver large-scale profitable growth by providing high-quality products and services to meet the evolving needs of our customers and generate sustainable value for our shareholders.”
AIA’s wholly-owned operation in China continued to be our fastest growing business in the third quarter. VONB growth was driven by higher agent productivity and a significant increase in the number of active agents. This excellent performance was the direct result of the consistent execution of our strategy to recruit and develop full-time, professional agents that are better able to serve the rapidly growing financial needs of consumers in China.
AIA Hong Kong delivered strong double-digit VONB growth in the third quarter. We continued to benefit from strong performances in our agency and partnership distribution channels and with broad-based growth across a number of different customer segments. The growth rate in the retail IFA channel moderated in line with our expectations as highlighted in our first-half results. Our agency performance was driven by an increase in the number of active agents and a positive shift in product mix resulting in a higher VONB margin.
In Singapore, VONB was higher compared with the third quarter of 2016, mainly driven by strong growth in the agency channel from enhanced agent productivity and an increase in the number of active agents. VONB in Thailand was lower in the third quarter, consistent with the performance in the first half, and we remain focused on the ongoing transformation of our market-leading agency distribution.
Asian macroeconomic fundamentals remain strong and resilient. Public finances are in a robust position and inflation remains benign, with policymakers retaining significant monetary and fiscal flexibility. Domestic consumption continues to replace traditional industrial output and manufacturing exports as an increasingly important driver of economic growth alongside the transition towards more service-driven economies across the region.
AIA benefits significantly from this positive economic backdrop and our strategy is fully aligned with the fundamental social and economic drivers of Asia’s long-term structural growth.
These drivers include large and growing working populations, accelerating urbanisation, rapidly rising incomes and low levels of existing social welfare and private insurance cover.
We remain confident that our significant competitive advantages developed over our long history in Asia place us in a highly-advantaged position to continue to capture our many significant growth opportunities in this extremely dynamic and attractive region for life insurance.